By: Morgan Harvey

Batteries, Blockchain and Big Savings

What does a house of the future look like? Ask Michael Beitler. As a semiconductor electrical engineer for 30 years, he understood the crazy disparity of electricity prices and how our century-old, expansive grids were making the issue only worse.

So he did what any engineer would do: He set out to fix it.

Step 1: He needed wholesale electricity, which he got through Griddy. You could use a fixed-rate plan for this, but since you are paying the same price no matter the time, you won’t get the same amount of savings. 

Step 2: He needed a battery. He started with a setup in his own home: A battery storage system that will store energy when wholesale prices are low only to be used during high price times. 

Michael has been a member of Griddy since April 2019 and has seen great results. The summer of 2019 definitely put his battery through the test. When prices skyrocketed in August with the average price around 26¢/kWh, Michael’s setup reduced his rate to 8.3¢/kWh (he uses around 2,000 kWh a month, for comparison). His battery would store energy when prices were really low overnight. Then when prices jumped during the afternoon, he would take his house off the grid and rely on the battery to power his home.

And for those highest four days, here is how he faired:

DateWholesale PriceMichael’s Price
August 534¢/kWh2.0¢/kWh
August 1259¢/kWh2.1¢/kWh
August 13$1.44/kWh2.4¢/kWh
August 15$1.58/kWh2.5¢/kWh

Michael, however, has gone one step further than just using a battery. He created a battery software solution that will tokenize the kilowatt and get price-tracking information, weather information and a timestamp of the actual price of power.

Introducing Illum

Michael formed Illum Applied Technologies and filed for a patent for his tokenized battery software in the fall of 2018. Besides helping consumers shift consumption away from high-peak times, he is on his way to provide an actual demand-response option to the people of Texas. What does this mean? It means you would get paid to lower your usage and could sell your excess usage back to the grid.

Illum uses a distributed ledger technology, similar to blockchain, and offers cryptographically secure transactions at a faster transaction speed and a micropayment transaction cost. With the use of advanced learning of past and current market conditions, they can determine when to charge or discharge the battery.  

Right now, the Texas market does not have a way for customers to operate demand/response programs because there needs to be a lot of guaranteed power and a cost-point mechanism. But when there are enough batteries in the market to aggregate all the data, then reliance is shifted from the major power plants to individuals. Instead of a couple of giant power plants providing energy to homes and businesses, these batteries would be interconnected – storing and trading energy with neighbors, grandmas and the pet store down the street. So if one plant goes down, it wouldn’t have that big of an impact on electricity prices because your home’s battery is there to jump in.

Once this energy network is built, Illum will act like a virtual power plant where customers get paid to reduce grid demand or even sell electricity back into the market by Illum aggregating many, many storage sources.

Long-Term Vision

Illum is looking to decarbonize the electric grid one house at a time as well as help be the intermediary between where we are with generation and where we want to be. Texas relies a lot on wind generation which is making the duck curve problem worse. (What’s the duck curve you ask? With generation becoming more dependent on solar, there is a gap between when usage ramps up and solar declines [because the sun is setting], causing other sources to kick in. When you graph the points, someone decided it looked like a duck. Quack). That, along with a lack of new generation to keep up with Texas’ growing population means this issue might get worse.

But if individual houses can store energy when wind and solar are abundant, it means there won’t be the need for the sudden ramp-up of dirty peaker plants when the sun sets and renewables end for the day. 

Batteries right now are a big investment with an ROI around seven years. But just like solar panels and electric cars have gone down in price, so will batteries. Illum is still a couple of years away from realizing their dream of every home having a battery that can buy and sell electricity to the market.

But they will be launching their MVP at the beginning of 2020. For those who are looking to help decarbonize the grid and shift how we use renewables, you can reach out to Michael to pre-order a battery and Illum’s software solution.

Email: michael@myvpp.io

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